Correlation Between Vanguard Energy and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Vanguard Energy and Franklin Mutual at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Energy and Franklin Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Energy Index and Franklin Mutual Global, you can compare the effects of market volatilities on Vanguard Energy and Franklin Mutual and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard Energy with a short position of Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Energy and Franklin Mutual.
Diversification Opportunities for Vanguard Energy and Franklin Mutual
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Franklin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Energy Index and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global and Vanguard Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard Energy Index are associated (or correlated) with Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Vanguard Energy i.e., Vanguard Energy and Franklin Mutual go up and down completely randomly.
Pair Corralation between Vanguard Energy and Franklin Mutual
Assuming the 90 days horizon Vanguard Energy Index is expected to under-perform the Franklin Mutual. In addition to that, Vanguard Energy is 1.82 times more volatile than Franklin Mutual Global. It trades about 0.0 of its total potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.36 per unit of volatility. If you would invest 2,732 in Franklin Mutual Global on November 4, 2024 and sell it today you would earn a total of 123.00 from holding Franklin Mutual Global or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Energy Index vs. Franklin Mutual Global
Performance |
| Timeline |
| Vanguard Energy Index |
| Franklin Mutual Global |
Vanguard Energy and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Energy and Franklin Mutual
The main advantage of trading using opposite Vanguard Energy and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Energy position performs unexpectedly, Franklin Mutual can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Mutual will offset losses from the drop in Franklin Mutual's long position.| Vanguard Energy vs. Vanguard Financials Index | Vanguard Energy vs. Vanguard Utilities Index | Vanguard Energy vs. Vanguard Materials Index | Vanguard Energy vs. Vanguard Sumer Staples |
| Franklin Mutual vs. Wisdomtree Siegel Global | Franklin Mutual vs. Us Global Investors | Franklin Mutual vs. Aqr Global Macro | Franklin Mutual vs. Alliancebernstein Global Highome |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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